It’s Official – The World Is Going All-Out On Digital Payments

Michael Moore joined TechWeek Europe in January 2014 as a trainee before graduating to Reporter later that year. He covers a wide range of topics, including but not limited to mobile devices, wearable tech, the Internet of Things, and financial technology.

Non-cash payments are now growing faster than GDP across the world, RBS report finds

It could soon be time to wave goodbye to paying with cash, as a new global report has found that the use of digital and contactless payments is growing than the world’s GDP.

That’s according to the World Payments Report 2015 from Capgemini and the Royal Bank of Scotland (RBS), which found that non-cash payments grew by nearly nine percent last year to reach a record high of 389.7 billion transactions

And this number is only set to continue growing as more and more consumers turn to digital payments and the rise of blockchain technology helps more companies to process secure transactions online.

Savvy

The report, which presented an estimate of the payments made around the world in 2014 and showed detailed figures on the previous year’s usage, found that Finland was the most digital-friendly nation in 2013, making an average of 450 non-cash payments in 2013, which the report noted was due to a large investment in payments innovation, as well as its cold climate encouraging the use of ecommerce.

The United States were next in the list of most active nations, making 390 non-cash transactions on average, followed by the Netherlands, Australia, Denmark, South Korea and Sweden.

“Each year banks face new and greater challenges in innovating to meet consumer demands for more convenient, faster, more secure and more mobile payment methods,” said Andrew Lees, global sales officer at Capgemini Financial Services.

“Facing this pressure and the need for new regulatory initiatives to support innovations like Immediate Payments, payment services providers must take a long-term approach for payments processing by building a holistic set of offerings that can deliver value on a global scale.”

Innovation

The report recommends that blockchain technology receives further investment to allow more companies to begin accepting and processing digital payments. It notes that blockchain’s combination of transparency, decentralisation and key signing permissions has the potential to improve the efficiency of financial transactions and transform the global financial network, ultimately providing an alternative for legacy banking systems in the future.

“New technology is accelerating change in the payments industry, offering holistic solutions as customers move from physical to digital payments as evidenced by the adoption of contactless in the UK with 53m transactions in March 2015. As a trusted partner, we’re at the heart of client transactions, facilitating the transition to digital payments,” said Marion King, RBS’ director of payments.

“As the digital economy transforms innovation in technology, it in turn gives customers greater choice and convenience in how they pay and conduct business.”

However, the report also highlighted that more effective regulation would be needed to help bring companies and encourage further innovation and expansion, particularly of real-time Immediate Payment transfer schemes.

Overall, 86 percent of payment executives surveyed by the report said that they believe changes may need to be made to the existing regulation to make Immediate Payments possible, particularly due to the lack of interoperability of systems built using different standards in Europe and around the globe.